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Lenny Dykstra pleads guilty to bankruptcy fraud

Former Major League ballplayer Lenny Dykstra pled guilty to federal bankruptcy fraud charges last week. The former professional ball player faces up to 20 years in prison for the bankruptcy fraud conviction. He entered a plea deal that will not allow him to appeal the conviction if he is sentenced to no more than 51 months in prison and $200,000 in restitution.

Generally, a person filing for bankruptcy must disclose all his or her creditors and assets in the bankruptcy petition. The bankruptcy laws allow debtors exemptions for specified assets that do not become part of the bankruptcy estate.

Those exempt assets are not subject to liquidation in a chapter 7 bankruptcy, and the exempt property does not generally directly figure in the calculations in a chapter 13 payment plan. An experienced Cincinnati bankruptcy lawyer can assist an Ohio resident in understanding how exemptions work in Ohio.

In Dykstra's bankruptcy case, authorities alleged that the former baseball player had either stolen or destroyed assets after filing for bankruptcy. Prosecutors claimed that baseball memorabilia, furnishings and other property were involved.

Authorities say that Dykstra then made false misleading testimony about the property during his bankruptcy case. In his plea agreement, Dykstra admitted to giving false or misleading testimony about property he removed from his $18.5 million mansion, a home previously owned by Wayne Gretzky.

Bankruptcy lawyers all across the country are aware that the government takes allegations of bankruptcy fraud very seriously. It is important for debtors contemplating seeking bankruptcy protection to discuss their financial situation and asset structures openly with an experienced bankruptcy lawyer.

Source: Thomson Reuters News and Insight, "Ex-baseball star Lenny Dykstra pleads guilty to bankruptcy fraud," July 16, 2012

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